Opinion | Govt should introduce business-friendly policies for cab operators2 min read . Updated: 17 Dec 2019, 11:07 PM IST
Policies should ideally stay away from micro managing these businesses on matters such as capping earnings
Technology has done a world of good in the mobility space by enabling electronic hailing of different transport forms such as cabs, autos, buses, bikes or their different models such as ride hailing, ride sharing, carpooling etc. These have become an integral part of people’s lives taking away the uncertainty that existed to find a form of transport to travel at any time of the day.
India offers a unique opportunity for technology based digital intermediaries/ aggregators from India to innovate, grow and extend their offerings internationally. Statutory recognition for such businesses as “digital intermediaries" or “transport aggregators" has been accorded through the Motor Vehicles (Amendment) Bill, 2019, something that the earlier Motor Vehicles Act, 1988, did not recognize.
Road transport is a state subject and therefore it will be important for states to think progressively in a business friendly manner and frame rules while ensuring customer’s safety. This sector has proved to be a huge “employment opportunity" generator and states such as Haryana, Telangana, Assam, Maharashtra etc. have partnered with such companies successfully around livelihoods, skilling, traffic management etc.
This is an opportune time for governments to think progressively and encourage business friendly policies making it viable for aggregators to efficiently and profitably run their businesses and enable them to further innovate and trigger ease and safety for consumers, livelihoods for driver entrepreneurs. It is also important for all stakeholders to note that an aggregator is not just a technology player who connects the customer and a cab operator but works with millions of dedicated cab drivers who are entrepreneurial partners in this journey. The technology layer is a 24x7 strong service that is dependent on secure and stable hosted servers, continuous R&D backed by market research, technology integrations with different platforms and layers such as GPS, Map visualisations, payment gateways and wallets, analytics, data storage, languages, inventory management, app provisioning etc and supported by thousands of employees. Any policies, guidelines or rules in this space should ideally not appear to micro manage businesses between an aggregator and a driver entrepreneur. Since this sector has already begun to show promising results by creating direct and indirect job opportunities to over 3 million people, it is important that this sector is nurtured further and not stifled through policies that may end up killing business viability. Policies should ideally stay away from micro managing these businesses on matters such as capping earnings or increasing compliance costs. Areas such as carpooling should be encouraged and let the customers decide whether to patronize or dump such options. While government engagements and collaborations on aspects of customer safety and security are welcome anything that interferes with economics of business is unnecessary. The industry is still at its early growth stage; hence, policy guidelines that may force the aggregator-driver entrepreneur model into a deemed employer-employee model with caps on earnings and increased compliance costs will certainly finish off this sector along with emerging innovations such as carpooling, ride sharing, etc.
Rameesh Kailasam is chief executive officer at IndiaTech.Org.